CMA investigation into Amazon and Deliveroo to examine impact on restaurant and grocery deliveries

Reduced competition in both the restaurant and grocery delivery markets will be considered as part of the Competition and Markets Authority (CMA) investigation into Amazon’s proposed investment in Deliveroo.

Earlier this week the companies told Sky News that the CMA’s probe was "speculative and not supported by evidence".

The Competition and Markets Authority (CMA) decided in December last year to launch an in-depth investigation after both parties failed to respond to its concerns that the merger would cause a dilution of competition across the delivery sector, which could ultimately stop prices from falling.

Amazon announced its plan to acquire a minority stake in Deliveroo as part of a $575m (£423m) deal in May 2019.

News of the investment followed the closure of Amazon's own food delivery arm, Amazon Restaurants UK. The concept was wound up in December 2018, two years on from its launch.

The CMA has said it would investigate if Amazon would have been likely to re-enter the restaurant delivery market independently and if its decision to instead merge with Deliveroo is likely to cause a substantial loss of competition.

It will also consider if the merger will reduce competition in online convenience grocery delivery, something both companies offer on a limited basis.

The CMA has said: “Although the market is nascent. Both parties have ambitious plans and are developing their offers. The future development of the parties’ offers is likely to make them closer competitors.”

The CMA’s investigation has a deadline of 11 June 2020.